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CIO Leadership profile, Mark Quinlan: Associated Bank spurns outsourcing

Green Bay, Wis. - Associated Bank is about to practice outsourcing in reverse.

At a time when companies of varying sizes are washing their hands of information technology, the Green Bay-based financial institution is about midway through a process of information technology ownership - and moving away from a period where its software applications were, in the words of executive vice president and chief information officer Mark Quinlan, “well outsourced.”

Confident that the company has a strong handle on existing compliance issues - including the Patriot Act (checking names against those on terrorist watch lists), Sarbanes Oxley (every public company's concern), and Gramm-Leach-Bliley (the HIPAA of financial services) - Quinlan has turned his attention to the bank's conversion to a new suite of [in-house] applications.

“We're doing the opposite of outsourcing,” he said. “I don't believe in outsourcing.”

At the core
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Historically, Associated Bank's core applications were outsourced to hosted solutions, and the conversion, to be completed by the first quarter of 2008, involves core banking applications that control deposit and loan accounts. One new application, CBS (Comprehensive Banking System), is licensed from the Milwaukee-based Fiserv, and it runs Associated Bank's checking and savings accounts, certificates of deposit, and consumer and commercial loans - “the core guts of what we do,” Quinlan said.

The project started in July of 2006, and will be completed in 18 months with a price tag of more than $5 million and unspecified cost savings, but there also is a controlling motivation.

“We're bringing these systems in-house, or converting to new systems," Quinlan said, "and one of the primary advantages of that is being able to control our own destiny and not be dependent on an outside vendor."

Somewhat ironically, the same company, Fiserv, which once provided those hosted services, now is providing the new in-house applications.

In addition to being in charge of the applications, the biggest selling point to Associated Bank's management was the ability to enhance the system from within - in a manner and time frame of its choosing - but the menu of benefits is not limited to controlling authority.

“There's much better functionality,” Quinlan said. “The technology is better, the business functionality is better, and it's really pretty simple.”

That simplicity - and the lack of emotionally charged legacy systems - has made change management much easier, but so has a somewhat surprising supply of labor.

To accommodate this conversion, the organization has seen a 50 percent increase in its IT staff during the past year, but finding the right people has been easier than Quinlan anticipated. He suspects the reason for that is people's desire to work where they can be challenged and where change is taking place, but some outreach was necessary to attract staff that Associated Bank did not have before - including a third shift of systems monitors.

To grow its workforce, Associated Bank relied on a combination of job fairs (advertised in newspapers), Web advertising, and word-of-mouth promotion.

Experience in the bank

Quinlan earned both a bachelor of arts degree and a master's degree in business administration from the University of Rochester in New York State. He joined Associated Bank in November of 2005 after previous stints at Citibank in Rochester, N.Y., First Fidelity Bank in Newark, N.J., and Star/US Bank in Cincinnati, among other career stops.

His connection to Wisconsin began when Star Bank acquired Firstar Bank in Milwaukee and shortly after that acquired US Bank. Quinlan led systems development for the merged Firstar/US Bank.

In his capacity as executive VP and CIO for Associated Bank, which operates data centers in Green Bay and Stevens Point, Quinlan is responsible for the company's information technology and for back-office operational functions like check processing, consumer and commercial loans, and eBusiness.

Quinlan carries out these responsibilities with the help of more than 1,000 employees in a company with 5,100 workers and an annual IT budget of about $50 million.

Associated Bank, which reported $1.5 billion in sales and $316.6 million in profits last year, operates more than 300 banking offices in Wisconsin, Illinois, and Minnesota. The bank serves businesses and individuals with deposit accounts, credit and debit cards, mortgage banking, and asset management services.

As such, IT security is a primary concern and, thanks to the Internet, radically different than it was 10 years ago. It starts with being extremely careful about what is placed on the network - for example, no wireless networks at branch locations - and some extra layers of protection that were mandated last fall with multi-factor identification. In this case, customers are asked to submit a non-invasive question that only they have the answer to. (Who is your best friend from high school? Who was your childhood hero?)

Firewalls are used to tighten control over the network, but Quinlan isn't ruling out wireless, especially if security concerns are addressed. “I would never say never, but it doesn't make sense for us right now,” he said. “It provides another potential vulnerability.”

Change of technological pace

It's not that Quinlan is without worry. The sheer pace of technological change has caused some sleepless nights, especially because his mindset is to leverage IT to improve business performance. Banking, he notes, is a low-margin business (despite $300 million in profits), and technology is counted on to improve production and efficiency.

With the competition moving swiftly, financial institutions have to respond quickly and make good IT purchasing decisions. The prospect of committing to a given technology product, only to have something even better introduced at a point where competitors can migrate to it, is enough to cause Quinlan some insomnia.

Fortunately, he has some executive friends to help prevent nightmares. Quinlan reports directly to the company president, Lisa Binder, sits in on board meetings, and is a member of the executive team. Associated has a group of a dozen people, including chairman and CEO Paul Beideman, that serve on an Executive Committee that examines the cost-benefit picture of all major corporate decisions, including large IT implementations, and constantly revisits the monthly business case, weighing new information on expenses and projected benefits.

Six months after implementation, a critical first review takes place, and subsequent reviews are conducted to further assess the payback.

His own project manager

The best lesson Quinlan has learned from an IT implementation - success or failure - is that it's okay to be controlling. He does not turn over the responsibility to someone else, such as a project manager, because in the end he's the one who is going to be judged by, and have to live with, the results.

Quinlan said Associated Bank is a “good-sized” organization, one with enough resources to make important IT investments, yet small enough to be nimble and responsive to its IT needs. He believes this enables the organization to avoid the business-IT tension that has harmed larger organizations and achieve the business-IT alignment necessary to build trust.

The two most important parts of the job, he said, are managing people and balancing expectations between the technology groups and the business side, “and have a good understanding of both,” he said.

Comments

Steve Lubahn responded 6 years ago: #1

This is an interesting article on the direction Mark Quinlan is taking the Associated Bank IT functions. His concerns over security and maintaining direct control over the IT network point out the regulator demands and pressures that banks face at this time. The risk of s data breach are great, not only in terms of direct costs to replace credit cards and account number and IT remediation expense, but also the impact on an organizatrions reputation and potential loss of customers.

I work for an IT firm that focuses on bank and credit union clients in the Upper Midwest. For the most part, we are seeing the opposite trend in institituions of fewer than about 250 employees. Most of these organizations are doing more IT and compliance outsourcing. Their limited IT staff, which often times is one person who is responsible for other functions in addition to IT, needs to outsource to both handle he workload and stay current. In addition, the security and network monitoring requirements in the FFIEC guidelines, in addition for the need to have a rigorous patch management program in place, have driven many of our clients to outsource some or all of their IT operations.

For financial organizations considering outsourcing, be very careful of the firm you engage and the backgrounds of their employees. Make sure they are a reputable firm, and be sure and check references thoroughly before getting them involved in your IT projects or ongoing management. Look for manufacturer and industry certifications for their employees, and also any certfications held by the organization as further indicators of their abilities and commitment to keeping current with changes in technology.

Robert Schmidt responded 6 years ago: #2

I am in the IT consulting business and also a long time Associated Bank customer. Nice to finally hear that they are doing something to improve their IT applications. Their online banking offering is a mess. Let's hope Mr. Quinlan's big CBS decision can improve things.

Jeff responded 6 years ago: #3

Associated Bank is the AntiChrist of banking. I left Associated years ago and got stuck with them again after they acquired First Federal. Most banks stack the deck in their favor; Associated takes it to new extremes. (They held a cash deposit as pending for 2 business days, just to force an overdraft.) Reprehensible.

amanda trenbeth responded 5 years ago: #4

The general tone of any interaction concerning associated bank ranges for complete disbelief to blinding rage. This bank has consistanly delivered surly customer service, mindblogling fees, and late night whiskey inspired, changes in policy(always to the detriment of the customer.)With many banks offering checking that accrues interest, sercue, informative on-line banking, and no gratuitous overdraft charges, thinly disguised as customer curtousy, there is no reason for anyone, to ever, open an account there. Over the four years I've been with this bank they have spelled my last name wrong on every statement, bank card and checkbook they sent me, disspite numerous attempts to correct it and no legal name change. That fellow consumers, is the customer service service standard, one can expect from this poorly run institution.

Erik responded 5 years ago: #5

I regret to report an experience exactly like Jeff's, above. My CASH deposit is still being held as pending after two business days and a holiday weekend, and suspicious, inexplicable $34 fees continue to accrue. Associated Bank's checking account policies are convoluted and confusing, with actual policy brazenly diverging from the promises of their deceptive costumer service agents. Their checking accounts are no more than a thinly disguised shell game designed to generate overdraft fees. I strongly urge every one of their customers to look elsewhere for their banking needs, as Associated Bank--in a field known for shysters and con artists--consistently ranks as the single most appallingly dishonest of them all.

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